Brokers react to bank acquisition

Brokers anticipate a strong lending partner that is well capitalized now that Home Capital Group has finalized its purchase of CFF Bank.

“Obviously we will have more products to choose from,” Eric Coching, a broker with the Mortgage Centre and an operator of a CFF Centre, told MortgageBrokerNews.ca. “CFF might have been undercapitalized and Home Trust brings that capital.”

Home Capital Group announced Friday that its wholly owned subsidiary Home Trust Company completed the acquisition of CFF Bank for $18.2 million, subject to final adjustments.

Under the terms of the deal, Home Trust acquires CFF Bank, while the 37 owner-managed CFF Centres will continue to be overseen by CFFG, according to Home Trust’s original release about the acquisition in August.

Initial reaction from many brokers has largely been positive, with many predicting Home Trust – a traditionally alternative lender – will boost its offering of ancillary products with the purchase of the Schedule I Bank.

What the product suite will look like still remains to be seen, according to Coching.

For his part, Jeff Smith, a broker with Neighbourhood Dominion Lending Centres, is wary of consolidation in the industry that could mean fewer options for clients. However, he argues this particular acquisition will strengthen broker offerings.

“CFF and Home Trust seems like a marriage made in heaven,” he said. “CFF has offered good products for some time and now that they have been purchased by Home Trust they will have more clout.”

Home Trust adds $245 million in assets and $1.5 billion loans under administration with the acquisition.

I am not sure how this is positive for the industry or the consumer.We just lost our only total package offering to a lender, I like home trust but this particular business model was the thing that we were waiting for.. a one stop shop.

We lost big on this one. But the saddest part is that a lot of brokers are happy about the outcome.